April 20, 2020.
written by: Karolina Bialkowska, Impact Events
- This post has been edited based on some feedback that we agree with. Namely, I did not account for the fact that each event is its own case (and yes, we 100% agree with this). Your event, and your contract, and your relationship with your vendors are unique. This is more of a general guideline as to how *some* businesses will suffer greatly and why they simply do not have the cash flow to offer refunds.
- Secondly, the suggestion was to account for credits and alternatives. I did mention this below in rescheduling but I should have been clearer – almost all the vendors we have spoken to have offered all sorts of alternatives – rescheduling, credits for future use, alternatives to the original plan, new ideas, etc., This post is simply to offer insight as to why a straight up cash refund is often not feasible – especially for the little guys and entrepreneurs.
- We appreciate the feedback and, as always, are listening to our clients and friends, fellow entrepreneurs, and the public. We hear you. This is difficult for everyone. This is just our perspective on why this is so particularly hard for events people and the companies they run.
Covid-19 has a special place in history.
It has, so far, killed hundreds of thousands of people – which means hundreds of thousands are grieving.
It is burdening health clinics, emergency rooms, and frontline workers around the world.
The entire world is shut down.
All events – which means your events – are cancelled.
Weddings, fundraisers, races, parties, retirements, galas, concerts – you name it, it’s been cancelled.
You are allowed to be sad. You are allowed to be disappointed. We are feeling it, too.
Here’s a primer on how to handle this very unprecedented global catastrophe.
First, allow yourself to feel sad, disappointed, even frustrated.
These are life’s great moments and often the markers of great love, success, celebration, and joy. These are lost moments to grieve. Allow yourself the time to do so – even if it was just a spring race you’ve been looking forward to all winter or your favourite co-worker’s ‘margarita-ville’ themed retirement party. Those special days and celebratory moments make life worth living and we’ve all lost the ability to plan them. It’s okay to feel angry and frustrated and sad.
But remember what to be frustrated at.
It’s not your planner: they’ve just lost all of their business, their entire season/year of work, and potentially their careers. This is worst-case scenario. They would never want this.
It’s not your venue: they just lost their entire income for the summer, if not the whole year. They can’t pay their staff, maintenance fees, or property taxes. They have zero income. This is their nightmare. They would never ask for this.
It’s not your florist: they’ve just invested everything into getting ready for the season, workshops, training, orders, and now have zero money coming in, zero bouquets to design, a rent/mortgage to pay and food to buy. This is terrifying.
It’s not your bar service/DJ/baker/caterer: They worked all winter spending money, building their businesses, buying new equipment, rebranding their websites, developing recipes, designing menus/playlists/drinks, and planning for their summer events, only to be left with a huge amount of debt and no events to pay themselves for their work. This will be devastating and may end some of their businesses.
Your frustration is at the unpredictability and fragility of human life on this planet. It should be aimed at the processes that got us here (endless development, environmental degradation).
It should be aimed at how unfair and uncontrollable this situation is.
And then you should let it pass. Because you, and your anger, cannot control the virus.
But you can control how you act and empathize with other people. You may have lost an event, and you are justified in your sadness, but someone else has lost their livelihood, the money to pay for their children’s food, the business they invested years of their lives into and a passion, in one, fell, swoop.
So move on to the next steps: reschedule, re-plan, reinvent, or re-evaluate.
Reschedule: Ask your vendors how to reschedule. Almost all vendors will honour their commitment to you and move your deposit over to a new date (provided it’s available) in the far future. Many will offer credits and every single one of them has a vested interest in helping you, keeping you as a client, and keeping you happy.
Re-plan: Ask your guests to plan for a new date. Ask your vendors for some fresh new ideas to keep up with trends. Keep your chin up and re-plan the whole thing (with a lot of the groundwork already completed). Think of it as an opportunity to freshen up and celebrate with gusto when the time finally comes.
Re-invent: Elope. Have a party for two. Have a virtual retirement and send everyone a personalized cocktail kit and mini-catering package from local providers. Have everyone log in and celebrate together. Have a virtual wedding and send all your guests some cupcakes from local bakeries.
Do something wildly different. Your bar service may make cocktail kits. Your florists could send mini bouquets. Your caterer may send care packages. Your DJ might develop a playlist. Get creative!
Re-evaluate: Or, maybe, this just isn’t the time for your event. Mourn. Accept. Move on. There will be a future and in that future there will be many opportunities for beautiful events and fun parties. Make a promise to yourself to throw a new party when it is safe to do so. Make a promise to ensure that your vendors and local small businesses will survive long enough to help you plan a new party when it is time.
Will you get a refund?
Barring very special circumstances, no. This includes the ticket to the concert put on by a local music guys, a deposit for your wedding planner, the deposit on your florals, etc.,
This excerpt is taken from the RaceRaves website, outlining a very important point. This is not your organizer’s/vendor’s/venue’s fault.
“Understandably, that can be one of the most frustrating aspects of this situation — the helplessness of knowing there’s no one to blame. But don’t use your disappointment as an excuse to lash out at an organizer who is only trying to do right by you and their other customers. Maybe you can’t control the situation, but you can always control your attitude.”
Why no refunds?
The biggest reason is “sunk costs.”
Depending on the event, 80% or more of total expenses are incurred before the event date, with most of those expenses being paid several months in advance.
This means buying new equipment to prepare for event season. Paying vendors deposits. Paying staff to plan. Paying for those hours spent on the phone planning with you. Countless emails. Paying leases for office space. Paying for office supplies. Paying for the website. Paying for the internet. Paying for the phone. Paying for the business license. Paying for insurance. Paying for all those fixed costs that bill every month, all necessary parts of doing business.
All these year-round costs of being a business are paid for by events that often occur in only 30% of the calendar year (June – August). In the meantime, your bartender/florist/planner still has to eat, plan, work, dream, design, and live in January. Your deposit is used to ensure the viability of the business that your event relies on. Your deposit is payment for all the work already done, way before the event starts. In fact, think of it like this: the day of your event most of the work is already over. When you demand your money back, you are not getting money back for an event that “didn’t happen,” you are asking someone to give you back their wages and earnings from a job already mostly complete.
Essentially, demanding a refund for your event all but ensures the business in question will not be viable and will not be able to continue working, paying bills, or even living above poverty.
Legally, you are most likely not entitled to one.
I know you’ve probably heard a lot of people throwing around the “force majeure” terminology like we’ve all just landed the lead role on Suits: Pandemic Edition.
Most large events have this clause or an “Act of God” clause. This means that, in the exceptional circumstance of a global life-altering unforeseeable catastrophic cataclysmic event, the organizer/vendors/venues can cancel an event. This is often the only time this clause is used. I would suggest that a global pandemic qualify.
Finally, because you want these businesses to survive and you want a vibrant community when this is all over. Keep this in mind:
“The Road Runners Club of America sagely advises to “take a long-term view of your role in ensuring the financial survival of your community-owned events.”
Plan a future event with your vendors, support them so that they stay afloat, and think about how you want your world to be when this is over.
This includes thinking long and hard about how you want your local economy to look on the other side of this. It may just be a $60 refund to you, but you may find that if enough people think like you, there will be no more local businesses, events, or entrepreneurs left when you do, finally, have the ability to celebrate. Then, what would have been a happy occasion will be one of mourning for a local economy littered with refunds.
So, the best way to #supportlocal? Don’t return things. Don’t ask for your money back. Don’t expect refunds. Instead, think of this money as an investment into your community’s future, look forward to the other side, and get creative.